We have fallen in love with Retro Funding. Have you too? As of late, Retro Funding has become a powerful meme in our industry, because it is the most efficient mechanism for rewarding impact in web3. Retro Funding rewards projects’ contributions after they have occurred, reducing bureaucracy and fostering a free-market, entrepreneurial environment where projects compete to make the most impact in Optimism’s Superchain ecosystem.

Pairwise is a ranking mechanism designed to make voting in Retro Funding Rounds fun and accessible. We invite not just badgeholders, but also delegates, OP holders and even recipients themselves to engage with Retro Funding Rounds. Voters in Pairwise don’t have to review every project but instead can just engage with the categories they hold expertise and interest in. Through this categorization we can help projects under the radar get discovered by voters, fostering network effects in the Superchain to drive more usage and collaboration.

Pairwise has also introduced pseudonymous voting on Retro Funding to enhance voter privacy and reduce peer pressure. This allows for more genuine expression of opinions. For more information on this feature, you can refer to this post.

How Stakeholders Made Their Mark

During Retro Funding 4 (RF4), Pairwise conducted a community signaling experiment where we divided the 230 projects into 11 categories and incentivized the wider community to engage with the Pairwise dapp. We divided up the voters into four different stakeholder groups: Recipients, $OP Holders, Badgeholders & Delegates. Recipients didn’t have adequate engagement as the addresses we had for recipients were derived from Farcaster and deployment addresses, which ended up with most recipients being unable to vote with their expected addresses.

Here is a breakdown of the engagement observed by the 3 different stakeholder groups:

Despite being a community experiment and knowing that the whole process of voting on categories takes time, some folks were excited to jump on it, play and discover cool projects. You can view the results here.

To get these results we used the Budget Box algorithm to rank the projects in each category by every user and the aggregation algorithm to determine the final rank of every project. To assign the OP amount for each rank, we used the same OP distribution as the final results of the official RF4 round, e.g. the 18th place project in Pairwise gets the amount of OP that the 18th place project got in RF4.

We can see how the different stakeholder groups voted and it's very interesting to see how the three different stakeholder groups assessed RF4.

Comparing Pairwise results to the official results

When comparing with the official RF4 metrics experiment, it is most appropriate to use the Badgeholders results. It is of course worth repeating, while the over 100 badgeholders voted in the official RF4 vote, in Pairwise only pool of voters aren't the same.

The first thing we can observe is how Zora and Layer 3 were given markedly less OP, each lost over 350k OP. On the other hand Aerodrome and Velodrome Finance were given markedly more OP, more than 220k each.

In general, wallets, privacy dapps and governance projects performed better on Pairwise than in the purely metric based round and meme coins and DeFi projects with relatively lower metrics performed significatively worse. Most notably, Ambire, Aragon, Umbra, Beam, ZKP2P & zkBob smart contract privacy wallet were all ranked over 130 positions higher with Pairwise, while Gloom, Ionic Protocol, fxhash, sudoswap, Catalog Radio, Overnight Finance, Orderly Network, Gamma, OpenOcean, Harvest Finance, & Lido Finance were all ranked over 80 positions lower with Pairwise. Likely Lido was given a lower score due to its dominance in the staking ecosystem, and Gamma potentially because of their recent exploit.

For a deeper analysis of Pairwise allocations compared to the official RF4 allocations check our https://www.pairwise.vote/rf4-results

Thank you to everyone who participated in this experiment. Your engagement and feedback have been crucial in shaping Pairwise. 🤗

Stay tuned for updates and new features that will make participating in Retro Funding even more rewarding!

Exploring the Impact of Community-Driven Decision Making in Retro Funding Round 4 with Pairwise